A firm had 200,000 in sales; 120,000 in goods available for sale; ending finished goods inventory of 20,000; and selling and administrative expenses of 55,000. Which of the following is true? a. net income was 25.0% of sales

A firm had 200,000 in sales; 120,000 in goods available for sale; ending finished goods inventory of 20,000; and selling and administrative expenses of 55,000. Which of the following is true? a. net income was 25.0% of sales

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A firm had 200,000 in sales; 120,000 in goods available for sale; ending finished goods inventory of 20,000; and selling and administrative expenses of 55,000. Which of the following is true?

a. net income was 25.0% of sales

b. the cost of goods sold was 140,000

c. the gross profit was 80,000

d. the beginning finished goods inventory is not determinable

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